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R-e-c-e-s-s-i-o-n. There—we’ve said it and we’re not going to say it again. By now you’re all sick to death of the “R” word, and are still stinging from the sad reality that the cosmetics industry is no longer immune to its fury.

In the foreseeable future, the current debacle will doubtless leave its mark on all of us in the beauty category. Being undaunted folk, however, it’s inevitable that we will rise from the ashes and get back into the dynamic spirit of our beauty business.

Before that, let’s ask ourselves: what lessons have we learned from this “day of reckoning?” How do we turn lemons into lemonade here? How does it translate into our future behavior? How do we better approach innovation?

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In short, just how do we get it done … better? Let’s start with how we could better relate to our partner, the customer.

Ladies and gentlemen, it’s time that we re-evaluate and restore this vital relationship. Salvador: You may remember from our inaugural column (December 2008) that we were pretty fired up that the beauty business has, to a very sad degree, lost touch with both its customers and its magic. In this column, we want to also address the potential of our losing touch with the truth—a key bonding point with consumers.

Looking carefully, how have consumers’ attitudes, needs and wants changed, given the Wall Street debacle and its resultant economic downturn? What exactly are they expecting—or rather demanding—from those with whom they do business? What is now pushing their buttons, both the good and the bad?

Responsibility, sincerity and integrity are in; self-indulgence, duplicity and hype are out.

Nancy: For all of us in cosmetics, we need to pay serious attention here. The consumer’s mood is clear.

Ours is a business that by its very nature fosters a strong emotional attachment with its customers. Sadly, we are slowly abusing this bond, with the result that our customers are becoming increasingly skeptical. And more and more, we are promoting our own lack of credibility with these crucial partners.

It’s understandable. There are an awful lot of products out there—particularly in highly emotionally based segments—that, for example, spout virtually unbelievable claims and promise literally unbelievable results.

Salvador: It’s certainly tempting to succumb to the same old horse race. “If ‘x’ offers eight-hour moisturization with wrinkle reduction, renewed radiance and flawless skin, then I must go for double digits. Let’s stretch the truth of our technologies to the limit.”

We’ve backed ourselves into a corner, but our standing with our customers is of critical importance to our future, and we are seriously risking eroding their trust in us.

“The cosmetics industry has always been about giving consumers state-of-the-art tools and formulations to look and feel their best,” says Jane Terker, president, Cosmedicine. “In recent times, our ever-increasing, pressing quest for success and profits can tend to influence many of us to intensify consumer demand by overstating promises and results—particularly in proportion to the reality of the ingredient formulation. Here, we run a great risk of disappointing, even alienating, consumers with promises that simply cannot be met. Far too often, the truth is getting lost in the marketing spin.”

Contrary to the unspoken opinion of some, our customer is a lot smarter and savvier than we think. Our industry’s propensity for hype is no longer resonating with these customers. Given their ever-increasing knowledge of our category and its products, they are now finding unfounded statements and claims downright unacceptable.

Given the sheer breadth of products out there, they have an escape hatch—to the next counter, to the next aisle, to the next brand.

Nancy: So, friends and colleagues, how about we focus on a new “R” word? Like renewed respect for our customers? Ensuring the integrity of our products and our promises. Surely, we’ve come a long way from the days of snake oil claims.

Salvador: Snake oil aside, a product’s ingredients are of vital importance here. With the wealth of emerging technologies becoming available to us, state-of-the-art ingredients and delivery systems are becoming more and more sophisticated—plant stem cells, super peptides, exotic antioxidants and submicron encapsulation, just to name a few.

It’s interesting that these technologies often partner perfectly with “wholesome” ingredients; e.g., apple stem cells both protect and maintain the functions of human skin stem cells while contributing to their longevity. The result is significantly prolonged younger-acting, younger-looking skin.

All of these emerging gems are bringing our product capabilities to a new and higher level of performance, consequently providing the foundation and support for elevated deliverables and claims.

Harnessing the power and potential of these ingredient performers is critical to the evolution of each and every one of our beauty categories. These technologies are original, smart and innovative—attributes that are key drivers in our business.

At the same time, we must simply act responsibly. We must perform all of the necessary testing to support ingredient claims to ensure that they do exactly what they need to do in the final formulation. Finally, it is of utmost importance to put them in at respectable and functional levels—not just simply salt-and-pepper the technology.

Nancy: With these exciting, sexy new technologies now available to us, there is also no longer a need to stretch the truth. We just need to ensure that, in the frenzy of product creation and innovation, we are putting in the right ingredients at the right quantities, with a strong eye toward integrity.

Salvador and I have a shared a particularly strong point of view that innovation is the core driver of our business. We in the cosmetic industry are illusionists; it is our role to enchant our customers, to get them caught up in our magic. We can’t ever lose sight that ours is a business of fantasy. We, as a team, need to escalate our imagination quotient to create a real emotional experience for our customers. They certainly need it now more than ever.

Having said that, what we deliver in both the realm of the imagination and the truth in beauty need not be mutually exclusive approaches. One simply does not deny the other. We beauty mavens may be living in the land of make-believe, but we shouldn’t simply be playing with fairy dust.

Salvador: It is clearly time for marketing and R&D to go back to the bargaining table and reassess how, together, our respective teams keep the cosmetics industry both magical and honest. We need to pay serious attention to the lessons of these tough times and take the opportunity to better know and respect our customers—and deliver the goods.

They deserve no less than inherent quality in our formulations and veracity in our claims.

Clinique has a brilliant new campaign that echoes these sentiments: “We never overinflate our promises ... or our prices.” It’s no wonder this brand has always resonated with consumers.

Nancy: For the rest of us, our products and our vision should reflect a strong combination of imagination and science.

The unparalleled creativity in our industry should be given free rein to tap into our customers’ emotions; to provide them with a unique product experience. Let’s encapsulate our magic and deliver it via science—and skip the science fiction.

Nancy McDonald is president of McDonald Marketing.

Salvador Pliego is senior director of technical customer service and R&D for the Americas at Kemira.